dropouts00073_mk.JPG Pankaj Chowdhry, president of a San Mateo start-up, is doing pretty well considering he dropped out of high school. Photo taken on 11/29/06.
Mike Kepka / The Chronicle Pankaj Chowdhry (cq) the source MANDATORY CREDIT FOR PHOTOG AND SF CHRONICLE/ -MAGS OUT

Photo: Mike Kepka

dropouts00073_mk.JPG Pankaj Chowdhry, president of a San Mateo...

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FILE — Aaron Swartz is the 19-year-old co-founder of reddit.com in San Francisco. Chris Stewart / The Chronicle

Photo: Chris Stewart

FILE — Aaron Swartz is the 19-year-old co-founder of reddit.com...

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Upstairs in his offices, a series of skylights provide natural light in meeting spaces.
Evan Williams, founder of Obvious Corp., dropped out of the University of Nebraska after just one year. He now epitomizes the fiercely independent, highly individualistic and self-powered streak that characterizes most Silicon Valley dropouts. He is photographed at his company, Obvious Corp. on South Park in San Francisco.
{Brant Ward/San Francisco Chronicle}11/28/06

Photo: Brant Ward

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Upstairs in his offices, a series of skylights...

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Sean Parker who helped launch Napster, in the offices of Clarium Capital Management LLC at the Lucas complex in the Presidio in San Francisco, CA, on Wednesday, November, 29, 2006. 11/29/06
Darryl Bush / The Chronicle ** Sean Parker (cq) MANDATORY CREDIT FOR PHOTOG AND SF CHRONICLE/ -MAGS OUT

Aaron Swartz dropped out of high school after one year to study on his own. Then he dropped out of college after one year to seek his high-tech fortune. He was still in his teens a year later when he hit the jackpot, selling his startup in October to Wired Digital for an undisclosed but lottery-like payout.

With his boyish mien and more geek credentials than engineers twice his age, the suddenly wealthy Swartz belongs to a new generation of young, brainy geeks who began booting up and logging on when their friends were still watching "Sesame Street." Before they were old enough to drive, they landed paying gigs. Now that another high-tech boom is heating up Silicon Valley, more of these technologically developed but underage techies are dropping out and starting up.

Theirs is the stuff of classic Silicon Valley mythology: young people deserting higher learning for high technology to follow in the famous footsteps of Bill Gates, Larry Ellison, Steve Jobs and Michael Dell. These dropouts barely raise an eyebrow in high-tech circles, where their worth is measured in real-world smarts, not Ivy-League degrees.

Of course, Silicon Valley has always thrived on youth. Virtually every revolution there has been fueled not by fossilized executives but by an anarchistic youth counterculture experimenting with technology.

"Everything that would get you detention at school will get you funding in Silicon Valley," said Paul Saffo, a valley forecaster and essayist who has been exploring technological change and its impact on business and society for more than two decades.

And that culture can be a powerful draw. Max Levchin, a University of Illinois at Urbana-Champaign graduate who sold the company he co-founded, PayPal, to eBay for $1.5 billion when he was just 26, uses his blockbuster success to persuade students at his alma mater not to follow his example. He makes the case that young people should seize the fleeting opportunity to get a different kind of education.

"You are essentially taking a class in real-life company-building on the nickel of a venture capitalist," Levchin said. "It's a pretty unbeatable deal."

The journey is the reward

That message -- reminiscent of the Jobs mantra, "The journey is the reward" -- resonates with youngsters who frequently feel intellectually stunted and socially outcast in high school. Some are "virtual dropouts" who run technology businesses on the side rather than focus on achievement tests and prom dates. Others drop out altogether when they envision what the traditional career path holds. These whiz kids shudder at the prospect of careers cut out of a Dilbert comic strip. So they gravitate to the innovative high-tech world that embraces free thinkers.

"One of the great things about Silicon Valley is that it's a complete meritocracy. It's not about where you went to school or who your parents are. It's about how hard you are willing to work and how bright you are," said Pankaj Chowdhry, a 32-year-old high school dropout. "It's the best place for somebody with my background."

Chowdhry, born in New Delhi, moved with his family to Louisiana when he was 2. In 1981, his parents gave him his first computer. The modem became his passport out of a one-stoplight town where kids hunted alligators for sport. His family's move to the Bay Area when he was 12 left him out of sorts. Chowdhry dropped out of Cupertino High School part way through his sophomore year because he felt he wasn't learning anything useful. He worked his way up through the ranks of a printing company, then moved on to a series of successful startups.

Today he is president of a startup that builds software for banks. Chowdhry asked that The Chronicle not name his company because, although dropping out may be widely accepted in Silicon Valley, it is not in the financial services industry. Chowdhry has a veritable showroom to his personal success: a collection of luxury cars. Now, many Indians who once cast a disapproving eye turn to him for career advice.

Yet, Chowdhry says, dropping out came at a cost. He missed out on many teenage rites of passage that round you out as a person. And, he says, the risks can be as great as the rewards. "When you talk to relatively intelligent people who drop out and go on to do interesting things, they talk about how much easier their lives would have been if they had stayed in school and had gone to college," Chowdhry said. "You have to work a lot harder if you don't have an Ivy League diploma."

Ben Sittler, a 30-year-old who dropped out of college after nearly five years of enjoying mathematics and computer science but blowing requirements like English and geology, says the experiences of dropouts vary greatly. "I've met quite a few in the valley," he said. "It works well for some people and not for others. Overall, I would recommend dropping out only to people who feel they have something better to do."

Sittler finds himself in good company at file-sharing service BitTorrent in San Francisco. His boss, co-founder and software prodigy Bram Cohen, first used a computer when he was 5 and designed a computer version of a popular children's game by the time he was in seventh grade. Cohen dropped out of college after struggling for two years.

Napster at 19

Getting some sweat equity also appealed to Sean Parker, who graduated from high school but never made it to college. The son of an MIT-trained engineer, Parker resisted pressure to follow a more traditional path. By the time he graduated, he had started a successful Internet business, worked at another and explored starting companies to tap into cutting-edge technologies. Parker was just 19 when he and friend and college dropout Shawn Fanning started Napster and an Internet revolution that would rock the music world.

While his friends split for college, Parker moved to the West Coast, where he was often the youngest person in the room. Surrounded by lawyers, bankers and venture capitalists, he missed being around people his own age. "None of your friends are doing anything remotely like what you are doing," he said. "You lose all common ground."

And Napster was hardly a typical startup. "It was as if my life was proceeding normally and then all of a sudden this hurricane swept me off my feet. It was a life-altering experience. Then the hurricane passed, leaving behind it all this destruction," Parker said. "To deal with that at such a young age was a more jarring experience than what most entrepreneurs go through."

It took some intestinal fortitude but Parker stuck it out. He is a veteran of some of the valley's headline-making companies, including Facebook, where he was the founding president. Now that he is spending time counseling startups, instead of being the youngest guy in the room, at 26 he's often the elder statesman.

Blake Ross has been the youngest guy in the room most of his career. The 21-year-old software developer was in ninth grade when he stumbled on a call for volunteer developers to help design Netscape's latest browser. He started as an intern at Netscape Communications when he was a 15-year-old prep school student in Miami. At age 17, he helped created the Firefox Web browser, which has since grown into the biggest threat to Microsoft's Internet Explorer since the company battled and defeated the Netscape browser for Internet domination. He has raised seed capital from high-powered venture capital firm Sequoia Capital for a stealth startup, Parakey Inc. in Mountain View.

A computer science major at Stanford, Ross pulled all-nighters trying to juggle the startup, Firefox and courses in computer science and creative writing. By the time he was a college sophomore, the workload overwhelmed him. He took a leave of absence from Stanford in April 2005. Yet the decision wasn't easy. "You wake up every day and wonder if you are making a mistake or not," Ross said. "I am on a completely different timeline than everyone I grew up with. I can go back to school but I can't go back with the people I went with originally." And, life can get a lot lonelier in an apartment complex than in a college dorm.

But startup life keeps Ross keyed up. "I have more energy right now than I will have at any other time in my life," Ross said. "So it's a great time to be running a startup."

Another advantage? People underestimate him because of his age. "It's hard to believe how often people write you off even though so many young people have succeeded in Silicon Valley."

Ross says he plans to return to Stanford, part of the back-and-forth toggle for many techies for whom learning becomes a lifelong endeavor, be it in the office or the classroom. His may be the first generation to send some dropouts back to school. Only one iconic old-guard, high-tech dropout went back to finish his degree: In the early 1980s, Steve Wozniak, under the alias Rocky "Raccoon" Clark (combining his wife's maiden name, Clark, and his dog's name, Rocky), went back to UC Berkeley to get an undergraduate degree in electrical engineering and computer science.

"Didn't want to sit and listen"

Not everyone is interested in getting back on the conventional track. Evan Williams, a 34-year-old entrepreneur who recently paid back venture capitalists who invested in his struggling podcast company so he could run it without outside pressures, never planned to get a degree. Williams, who embodies the fiercely independent, highly individualistic and self-powered streak that characterizes most Silicon Valley standouts, left the University of Nebraska after one year because he knew he was never going to work for anyone but himself.

"I just didn't want to sit and listen to what other people had to say for four years," said Williams, founder of San Francisco's Obvious Corp., previously called Odeo. "Arguably that was arrogant. I certainly had things to learn. But a lot of people go to school to learn to be like everybody else."

So far, the only company that employed Williams for any length of time was Google, and that was because he sold his blogging company to the Internet search giant, one of the few Silicon Valley companies to use college records to screen applicants. In fact, Williams faced hurdles in getting Google to hire three of the six employees from his company who did not graduate from college. Ironically, Google was started in 1998 by Sergey Brin and Larry Page, both Stanford doctoral program dropouts.

Of course, for every dropout's success story there are untold stories of disappointment and failure. Nathan Ensmenger, a University of Pennsylvania history professor who tracks the Silicon Valley labor market, says youngsters often are lured by high starting salaries and low barriers to entry. But not everyone can hit a startup grand slam, leaving many with fewer options as they try to climb the corporate ladder that quickly tops out for techies without a degree.

"If we were shooting a movie of this, there would be a disclaimer at the bottom, 'Do not attempt this at home,' " said Paul Graham, a startup investor and founder of Y Combinator. "It's an extreme example of a fundamental, underlying trend: If you can program, you don't have to play by the rules.

"We discourage people from starting startups too young. You're not a loser if you finish college first."

Silicon Valley can't wait

But some -- including Swartz -- decide Silicon Valley can't wait. Swartz built his first Web site when he was 13, an online encyclopedia written by the people who use it. Bored in class, Swartz convinced his parents to let him study at home after his freshman year of high school. "I couldn't take it. It seemed pointless and silly. It wasn't so much about learning. It was about sitting in desks and following orders."

Swartz enrolled in a handful of classes, from logic to number theory, at a community college and embarked on projects that challenged him intellectually and took him around the country.

In school, adults assumed he couldn't be up to anything that interesting. On the Internet, he was taken seriously. At 14, he helped develop the popular Web content- distribution software RSS. Soon he was in demand, attending technology conferences and concentrating on such major efforts as creating universal ways to exchange online information through a group founded by Tim Berners-Lee, considered the father of the Web. In 2002, he helped Creative Commons, a nonprofit organization at Stanford formed by law professor Lawrence Lessig and other legal scholars to encourage the legal sharing of writing, music and other works.

It was Lessig who encouraged Swartz to attend Stanford, where he majored in sociology. Toward the end of his freshman year, Graham e-mailed Swartz to suggest he apply for the Summer Founders Program, which offers three months of seed funding from Y Combinator. Swartz moved to Cambridge to work on his own startup, but later joined forces with Reddit.com, which taps "the wisdom of crowds" by letting users submit and rank news and other online content. He dropped out of Stanford.

Over the next year, Swartz worked long hours in cramped quarters hunched over a small screen, his only glimpse of the outside world through small windows that opened up on chalky skies. Over time, the Reddit site grew in popularity. Then came the life-changing offer from Wired Digital.

At first, the prospect of never again scrounging for loose change under threadbare couch cushions thrilled him. Then Swartz succumbed to feelings of anxiety and guilt over the windfall. Even now that he is more comfortable with his newfound fortune and levitating status in the online world, Swartz says he won't turn into another boom kid.

Fancy new car? "I don't know how to drive," Swartz wrote on his blog, Raw Thought. Big house in the suburbs? "I like living in small apartments." Expensive clothes? "I've worn a T-shirt and jeans practically every day of my life." Hanging with the cool kids? "I'm so shy I don't even hang out with the people I know now."

Swartz moved to San Francisco a few weeks ago on his 20th birthday. After a two-year stint at Wired, Swartz says, he plans to head back to academia. But, chances are, he'll return to the startup drawing board. Swartz may have attained the Silicon Valley dream but -- like so many of his peers -- he's not done dreaming.

Sean Parker

Age: 26

Dropped out: Before he went to college

Landed: Co-founded Napster, then took on big roles at several Silicon Valley startups